Dame Shirley Porter (Hansard, 30 June 2004)

§ Peter Bradley (The Wrekin) (Lab)
This is not the first time that I have raised issues relating to Westminster city council here. I make no apologies for that. There is long-unfinished business. The deputy leader of the council recently described me as a "Shirley Porter obsessive". I am afraid that that is characteristic of his party's occasionally casual and often concerted attempts to undermine those who have been critical of Shirley Porter and her policies over the years, including myself and colleagues, community activists, and the district auditor when he investigated her affairs. It also shows a failure to understand the depth of feeling aroused by the issues that I want to debate this afternoon, and an inability to acknowledge the grievous wrongs done in Westminster in the Conservative party's name.

If I have an obsession, it was probably nurtured during my time as a councillor in Westminster. I am obsessed with probity in the making of public policy, in governance, and in the justice administered by the courts. I am not the only one with that obsession. When the Westminster objectors, of whom I was one—those who registered objections with the district auditor and set the whole "homes for votes" inquiry in train—sought to raise funds so that we could be legally represented at the public hearings, we collected £240,000 from people all over the UK. They were people with all kinds of political backgrounds or with none at all, but believers in democracy, who felt that the establishment should not always be allowed to get away with it. That was a humbling and inspiring experience.

That is why, some 18 years after the events of which we complained began, 15 years after we registered our objection with the auditor, 10 years after he produced his provisional findings of "disgraceful, improper and unlawful" gerrymandering in Westminster, eight years after he published his formal findings of "wilful misconduct", seven years after the High Court endorsed those findings, three years after the Law Lords pronounced on what they judged to be a deliberate, blatant and dishonest misuse of public power amounting to "political corruption", and a year after the European Court of Human Rights rejected Shirley Porter's final legal campaign as "manifestly ill-founded" and "inadmissible", we still seek justice and the vindication of our systems of scrutiny and redress in Government—in local government in particular. After all this time, we still despair of achieving either of those in full.

It is worth reminding ourselves that the "homes for votes" scandal was not just about gerrymandering electoral results; it was systematic political corruption to the point where the pursuit of power overwhelmed any sense of responsibility in the exercise of it. Chilling instructions were issued by political leaders to officers of the council to be "mean and nasty" to vulnerable people in the community—and they certainly were. Housing and planning policies in particular were bent to a political stratagem, which decimated long-established traditional working class communities and dispersed them to the four winds. Hostels intended for the homeless were sold off and gentrified. Homeless families 136WH were forced into asbestos-ridden tower blocks, in the name of building a stable Conservative majority in Westminster.

All that was obvious to Labour councillors, to community activists and to many journalists while it was happening. However, the administration was protected by secrecy, concealment and obstruction—as the district auditor found when he tried to investigate those affairs. The judges in the Court said that Shirley Porter and her acolytes had lied to us as they lied to the auditor.

The stratagem was reliant on the acquiescence, if not the active connivance, of the Government of the day. Now, when it seems that at least some of the £42 million surcharge for which Shirley Porter is liable will be recovered, we are confronted with the same lack of accountability, the same concealment and secrecy—and it is just as unacceptable now.

Over the past few years, Shirley Porter has defied public opinion, the findings of the auditor and the judgment of the courts, while she cruises between luxury apartments in Israel and Florida. On 24 April this year, in a statement released to the press just as the Sunday papers were going to bed, she said: I have decided that it is time to bring this case to an end, despite my belief that I did nothing wrong. What breathtaking arrogance! She has now decided that she is prepared to pay £12.3 million of a £42 million surcharge. She is establishing a new legal principle that felons should set the tariff for their own misdemeanours. If we accept that precedent, we can negotiate our own sentences when we do wrong, and rip up our parking tickets if we object to them.

Westminster city council's chief executive said that hard bargaining had taken place on both sides, as if such bargaining were acceptable. It should be remembered that the bargaining into which Shirley Porter and her advisers entered was with her protégés on Westminster city council, because some of the leading figures in Conservative Westminster now were her lieutenants during her reign of terror in the mid '80s.

There is another important principle. Surcharge is not a sentence or a tariff, but a calculation of loss and deficiency caused by the unlawful policies that Shirley Porter pursued. If £12.3 million is accepted as a full and final settlement of a surcharge of £42 million, there will be a £30 million loss to the public purse.

I have had a lengthy, revealing and profoundly disappointing correspondence with the chief executive of the Audit Commission, Steve Bundred. He has confirmed that the Audit Commission was party to the negotiations between Shirley Porter and Westminster city council—not so much in the public interest, as in order to recover its own costs, which amount to about £1 million. Mr. Bundred told me in writing: I am fully satisfied that the settlement was equitable and a good outcome. The question is: for whom is it a good outcome—for Westminster city council and its council tax payers, for the Audit Commission, or for Shirley Porter? Is it credible that £12.3 million is all that Shirley Porter has access to? I use the word credible advisedly; should we believe a word that she says? Her record is not impressive.

On 28 December 2001, the courts awarded a freezing order that obliged Shirley Porter to disclose her assets, and restrained her from in any way dealing with or diminishing the value of her assets worldwide whether in her own name or owned beneficially by her and whether solely or jointly owned up to the value of £33 million. It warned her that if she failed to comply with the freezing order, she would be in contempt of court and liable to imprisonment, fined or her assets seized.

On 9 January 2002, Shirley Porter disclosed in a sworn affidavit that she had no more than £300,000-worth of assets worldwide. Then, according to the Daily Mirror, she went on a £90,000 cruise in the Pacific. The Metropolitan police are now investigating whether she committed perjury and are seeking the view of the Crown Prosecution Service on whether there is sufficient evidence to pursue a prosecution. Belatedly, in February 2003, a disclosure order was awarded that she should reveal her control of or interest in worldwide trusts. She failed to comply with that order. By July 2003, Westminster city council had paid lawyers some £400,000 to track her assets—and recovered £3,000 and a gold-plated toilet seat.

On 30 June 2003—exactly a year ago today—the "Today" programme broadcast evidence of sales of Tesco shares to the value of £1.2 million, in which Shirley Porter had an interest, which took place on 14 May 2002, just a few months after she had disclosed assets of no more than £300,000. The programme had come across e-mails that revealed offshore companies in the British Virgin Islands and what was assessed as £34 million in Guernsey bank accounts. Those e-mails also revealed that she had made loans to her son of £1.5 million and that he was asking for another $2 million to get him out of trouble. The "Today" programme had discovered more in two weeks than Westminster city council and its expensive lawyers had discovered in two years.

After that broadcast, and the reports that appeared in national newspapers, it was estimated that Shirley Porter's wealth was anything between £60 million and £400 million. Now we are told by Westminster city council and the Audit Commission that the proposition before the council is the best achievable deal. We have not been told that by Shirley Porter, and that is not surprising because she has done everything she can to evade justice and proclaim her innocence in defiance of the facts. Suddenly, she decides to hand over £12.3 million that she said she did not have, and we are expected to accept that the deal is in the public interest.

The problem is that we are in no position to judge, because Shirley Porter and Westminster city council have signed a confidentiality clause that obscures the details of the contract. The Audit Commission, with a remit to ensure probity, transparency and accountability in public finances, is a party to that clause. That means we can only speculate about the basis of the deal. I speculate that Shirley Porter recognises that the only way to unfreeze her assets is to pay off Westminster city council with a fraction of her worldwide wealth in order to release the rest for her to access. No doubt the trustees who sheltered her funds in 138WH the Virgin Islands and elsewhere have demanded the anonymity of the confidentiality clause to conceal their role in the affair.

I may be wrong, but by the time we know—if we ever do—it will be too late. The deal becomes unconditional on 1 July: tomorrow. When it does, it is a "full and final settlement"—a quotation from Audit Commission correspondence. If it transpires that Shirley Porter has again lied about her assets, it will be too late. If she inherits a substantial fortune, which is not impossible, it will be too late. None of that newly found or newly discovered wealth will be attachable to the deposit of £12 million on a £42 million liability. By then the clause will have served its purpose, and she will be laughing all the way to an un-numbered Swiss bank account.

I find it shocking that the Audit Commission should be party to that arrangement, entirely on the basis of the chief executive's sanction. As he has confirmed in correspondence with me, the commissioners, although advised of its progress, have not seen the terms of the agreement.

Section 15(1)(a) of the Audit Commission Act 1998 confers a right on individuals to inspect the accounts to be audited and all books, deeds, contracts, bills, vouchers and receipts relating to them". On 19 July, Westminster city council's books will be open, and I and others will have the right to inspect them. Even if that statutory right sets aside the confidentiality clause, however, it will be useless because whatever we discover we will discover too late. Shirley Porter will have bought her freedom from any further liability. All parties to the deal, including the Audit Commission, know that.

I now turn to the role of the Conservative party in these affairs. I gave the right hon. Member for Suffolk, Coastal (Mr. Gummer) an opportunity, as I have done many times before. to attend and contribute to the debate, and I accept that he has a long-standing engagement that prevents him from being here. For that reason I will curtail my comments involving him.

§ David Winnick (Walsall, North) (Lab)
As my hon. Friend has said, the deal is shameful. When we raised the matter repeatedly in the Chamber before 1997, Conservative Ministers and, indeed, the Prime Minister of the day, said that if Shirley Porter were found guilty after all legal processes had been exhausted, they would make a statement. However, they refused to condemn her in the meantime. Legal processes have now been exhausted, but there has not been one word from the Conservative party, and that, too, is shameful.

§ Peter Bradley
I thank my hon. Friend for his comments; he has anticipated the point that I am about to make. He gives me the opportunity to pay tribute to him and many other parliamentary colleagues for the support that they gave us before I was elected to this House, when we were fighting what seemed a losing battle against the establishment of the day to reveal the wrongs and to seek to right them. His role was prominent, and we are grateful to him.

My hon. Friend is right to say that one of the most extraordinary features of this long-running pitiful saga is the fact that in all the years since, and particularly in the 10 years since the district auditor published his 139WH provisional findings, not once has a senior figure in the Tory party condemned what Shirley Porter and her administration did in the name of their party—not John Major, not the right hon. Member for Richmond, Yorks (Mr. Hague), not the right hon. Member for Chingford and Woodford Green (Mr. Duncan Smith), and not the current Leader of the Opposition.

It is a fact that the Conservatives in Westminster city council, that flagship Thatcherite council, could not have done what they did without the connivance of the Government of the day. Ministers at the highest level knew exactly what they were up to. Let me quote from a letter that Shirley Porter wrote on 19 December 1986 to Margaret Thatcher, the Prime Minister of the day: We in Westminster are trying to gentrify the City. We must protect our electoral position which is being seriously eroded … I am afraid that unless something can be done, it will be very difficult to keep Westminster Conservative! I do not consider that an appropriate letter for the leader of the council to write—on council notepaper, I assume—to a Prime Minister.

In March 1990, lobbyists employed by Shirley Porter reported to her that: John Gummer is the most alert of Ministers to political nuances … Gummer is said to be angry that the D of E officials had failed to understand the real and political consequences of the redistributive effects of the community charge". Shortly after that, the anticipated community charge that Westminster was to levy was reduced from £429 to £195—much to the chagrin of other Conservative authorities throughout the country.

By the time the district auditor published his report, the right hon. Member for Suffolk, Coastal was Secretary of State for the Environment. He cannot have forgotten—nor, indeed, has my hon. Friend the Member for Walsall, North (David Winnick)—what he, and the then Prime Minister, said in the House of Commons. Let me quote three of the seven assurances that the right hon. Member for Suffolk, Coastal gave the House. In 1994, he said: In the end, if any of the allegations are found to be true, I will, as I have said unreservedly and without distinction between political parties, condemn them"—[Official Report, 13 January 1994; Vol. 235, c. 349–50.] In 1996, he said: I have made it clear that I would condemn utterly any failure to meet the highest standards of propriety,whenever it is found and whoever is found guilty."—[Official Report, 9 May 1996; Vol. 277, c. 367.] Again in 1996, in case we had misunderstood him earlier, he said: when wrong is done and proven beyond reverse, it should be condemned, and I would be the first to condemn it."—[Official Report, 14 May 1996; Vol. 277, c. 863.] He may not have been the first to condemn, but today I tried yet again to give him the opportunity at least not to be the last. I accept that he cannot be here now, but I do not accept that he has had no opportunity to redeem his pledge, either in the past or during our lengthy correspondence over 18 months. If he did redeem it, as my hon. Friend and I have made clear, he would be unique in his party.

Finally, I want to put some direct questions to the Minister. Is she satisfied that less than one third of the surcharge imposed on Shirley Porter is to be collected? Is she content that, even if Shirley Porter is found to have more assets, or inherits more assets, they will not be recoverable? Does the Minister believe that this is the best deal that can be struck with Shirley Porter and, if so, on what basis does she think so? What does she know about the details of the deal?

What is the Minister's view of the Audit Commission's agreement to be party to the confidentiality clause, and on the way in which the commission has made its decisions? What has she to say about the rights of individuals to object to, and seek remedy for, the accounts of Westminster city council if the deal is done? Will she ensure that even at the eleventh hour the proposed deal is suspended so that she can be satisfied about this matter, and the current police investigation can be completed?

It is interesting that the title that has been chosen for this Adjournment debate is "Dame Shirley Porter". That is not the title that I gave it, but the House has decided otherwise. Is it not obscene that Shirley Porter continues to boast the award of the title of Dame of the British Empire on the basis of her services to local government? Is that not an insult to those who have earned their distinctions? When will that wrong be righted? Shirley Porter was responsible for the worst, most cynical and callous, and most costly, conspiracy of political corruption in this country in the modern age. Is she really going to be allowed to have the last laugh?

§ The Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister (Yvette Cooper)
I congratulate my hon. Friend the Member for The Wrekin (Peter Bradley) on securing the debate, and on the huge amount of work that he has done to pursue justice on behalf of people in Westminster over many years.

The case of Dame Shirley Porter and her colleagues in the "homes for votes" scandal has been a blot on the reputation of local government. My hon. Friend has also set out clearly the failure of many senior Conservatives, at the time and since, to condemn the events that took place, and the deep unfairness and injustice of what happened to those who lived in the Westminster area at that time.

My hon. Friend and his colleagues have played an important role in the saga from the very beginning. They first raised an objection to the accounts of Westminster city council in July 1989, and have followed all the twists and turns of the case, through the auditor's consideration and judgment and the numerous legal cases, to the final decision of the European Court of Human Rights in April last year. That settled the last legal issues once and for all, and finally confirmed the auditor's judgment of wilful misconduct and the surcharge that he placed on those concerned. The amount of the surcharge reflects the scale of the misconduct.

All of the surcharge, including interest, is a debt due to Westminster city council, which has a duty to act in the interests of its taxpayers in pursuing the debts. I understand that it has reached an agreement with Dame 141WH Shirley Porter for a final settlement of £12.3 million, which is due to be paid tomorrow. An agreement with David Weeks, who was deputy leader of Westminster city council at the time, is still being pursued. I understand my hon. Friend's concern that the settlement does not reflect the full amount of the surcharge against Dame Shirley Porter. She originally faced a judgment debt of some £27 million, plus interest and costs. My hon. Friend has described some of the things that happened, and the fact that the council has needed to trace and freeze assets, many of which have been moved overseas, as part of the process.

My hon. Friend raised a series of questions in his speech. As he will know, my right hon. Friend the Minister for Local and Regional Government and the Under-Secretary of State, Office of the Deputy Prime Minister, my hon. Friend the Member for Corby (Phil Hope) deal with many of these issues in the Department. They are on the Front Bench for the debate taking place in the main Chamber as we speak, but I will do my best to answer the points made by my hon. Friend the Member for The Wrekin, and if I miss any issues, I will ensure that I raise them with my colleagues so that they can respond to him further if need be.

My hon. Friend asked about the nature of the settlement that has taken place. The Department has no powers to intervene in the settlement or the judgment. It is a matter for Westminster city council to make a judgment about the settlement and to decide its appropriate level. We have no powers to intervene, to influence the council's judgment or to compel the parties to provide us with information. It would not be appropriate, therefore, for the Government to take a view on the fairness or otherwise of the settlement.

Westminster city council must account for its decision. Its judgment will be subject to audit scrutiny in the usual way. That will fall to the current appointed auditor, Derek Elliot, who will follow the procedures for ensuring that his responsibilities are carried out. Should he determine that any matter should be reported in the public interest, he will need to take action. My hon. Friend expressed his worry about the chance for individuals to protest. I understand that it will be possible for individuals to express worries to the auditor at the appropriate time, as part of the audit scrutiny process, and I shall be happy to provide him with more information about that process.

My hon. Friend also referred to the Audit Commission's involvement in the settlement. I know that he has also raised the matter with the Audit 142WH Commission directly. As he will know, the appointed auditor at the time—John Magill—was the person responsible for investigating the objection to Westminster city council's accounts raised by my hon. Friend and his colleagues in 1989. Following a detailed investigation and a public hearing, he determined in May 1996 that Dame Shirley and her colleagues were guilty of wilful misconduct and subjected them to a surcharge of some £31 million.

The legal challenges to the appointed auditor's original judgment on the objection to the council's accounts in 1989 incurred significant costs; the Audit Commission is liable for those, and is supporting the appointed auditor in defending his judgment. The costs were added to the debts of Dame Shirley Porter and her colleagues in the court's final judgments. The Audit Commission has therefore been responsible for pursuing the debts and has done so completely separately from its responsibilities for appointing auditors to the council.

Rather than pursue its debts separately, the Audit Commission combined efforts with the council, and that has resulted in the Audit Commission being party to the settlement that will be reached tomorrow with Dame Shirley Porter. Of the £12.3 million of the settlement, about £1 million will go to the Audit Commission. As a consequence, the Audit Commission is also party to the other terms of the settlement, including the confidentiality clause.

Again, it is not appropriate for the Department to take a view on the matter, as it is something about which the Audit Commission must make its own decision. I understand that it is content with the outcome of the settlement, but of course, its view will also be subject to the usual scrutiny of its own auditor, which is the National Audit Office, so that will need to be scrutinised, too. My hon. Friend has raised a series of extremely significant issues during the debate, and some important questions need to be answered by Westminster city council as part of the process. He is right to say that the saga of Dame Shirley Porter and the "homes for votes" scandal has been long running. It has taken much time to pursue justice, and it is important that people consider that justice should be done. It is therefore important that my hon. Friend's questions should be answered. He will understand that the Government do not have a role, or powers to intervene, in this matter; nevertheless, I appreciate the importance of his having raised it this afternoon.